LANCASTER -- The former CEO of Worley & Obetz illegally pocketed more than $1 million while perpetuating a "massive bank fraud" over a four-year period, Fulton Bank alleged Tuesday in a lawsuit filed in U.S. Bankruptcy Court.

The Lancaster County financial institution filed the lawsuit to block Jeffrey B. Lyons and his wife from withdrawing a $155,000 certificate of deposit from the bank.

Fulton Bank's parent company, Fulton Financial, said six weeks ago that it had lost $32 million of the $48 million it had loaned to Worley & Obetz. But on Tuesday, Fulton Financial said its losses were actually $29 million, which was less than originally anticipated.

Based in Manheim, Worley & Obetz fired Lyons in May, when he failed to attend a meeting with a commercial customer to discuss its payments to the company. Shortly thereafter, Worley & Obetz announced 100 layoffs. When the company announced the cutbacks, it implied that fraud on the part of Lyons was to blame. Worley & Obetz initially planned to move on as a downsized company, but when its lenders balked at the plan, the company announced on June 4 that it was closing for good.

In the lawsuit it filed Tuesday, Fulton Bank accuses Lyons of giving the bank fake account receivables -- the amounts of money owed by customers -- for at least four years. Based on those fake accounts receivable, Fulton extended millions of dollars in loans to Worley & Obetz and its affiliates, the lawsuit says.

At the same time, Fulton said in the lawsuit, Lyons received "directly or indirectly in excess of $1 million in transfers" from Worley & Obetz.

The $155,000 certificate of deposit with Fulton Bank was opened by Lyons and his wife in 2009, the bank said in its lawsuit. The bank froze the CD on May 21 after learning Lyons had been fired for allegedly carrying out fraud.

After Lyons was terminated, his wife, Julie, "periodically attempted to withdraw some or all of the funds on deposit in the account," Fulton said in the lawsuit.

An attorney for Christine C. Shubert, the court-appointed trustee charged with ensuring that Worley & Obetz follows bankruptcy law, wrote a letter to Fulton Bank stating Shubert believes she has claims against Lyons and his wife relating to "fraudulent transfers made from the company."

"Fraudulent transfers" is a term referring to the illegal transfer of assets to hide them from entities that are owed money.

Since the trustee, Lyons and his wife all want the $155,000, Fulton's lawsuit is asking the court to determine where the money should go.

Correction: An earlier version of this story incorrectly listed Fulton Financial's losses at $36 million. The company says its actual losses were $29 million, which was less than it originally estimated.